Many college graduates are facing their own fiscal cliff when it comes to student loans.

According to the Federal Reserve Bank of New York's Quarterly Report on Household Debt and Credit, outstanding student loan debt in the United States now stands at $956 billion. The report states that more student loan borrowers are currently falling behind on their payments.

Since 2003, student loan debt has been increasing every quarter. Eleven percent of borrowers are now more than 90 days delinquent on their loans, which is higher than “serious delinquency” on credit cards. Unlike mortgages and credit card debt, however, it’s nearly impossible to wipe away college loans with bankruptcy. Instead, students are saddled with thousands of dollars of debt for decades, making it harder to sign a mortgage, save for retirement, and build good credit.

“In these tough times, a college degree is still your best bet for getting a job and decent pay,” said The Institute of College Access & Success President Lauren Asher in a statement. “But, as debt levels rise, fear of loans can prevent students from getting the education they need to succeed. Students and parents need to know that, even at similar looking schools, debt levels can be wildly different. And, if they do need to borrow to get through school, federal student loans, with options like income-based repayment, are the safest way to go.”

Earlier this month, the U.S. Department of Education issued final regulations aimed at helping federal student loan borrowers lower their monthly payments and avoid default. The “Pay-As-You-Earn” repayment plan gives additional repayment relief to recent graduates by tying their monthly payments to their income. Loan forgiveness under this plan now occurs after 20 rather than 25 years of payment.

Still, that’s only for federal loans taken out between September 30, 2007 and at least one after September 30, 2011.

According to The Institute of College Access & Success, two-thirds of college seniors who graduated in 2011 had student loan debt, with an average of $26,600 per borrower. Students who attended college in the Northeast and Midwest faced the highest debt, with New Hampshire leading the 50 states at an average debt of $32,450 per student. Utah and Hawaii had the lowest and second lowest average debt at $17,250 and $17,450.

Mike Halterman, 27, attended the University of South Florida in Tampa and earned an associate’s degree before stopping short of a bachelor’s degree. Halterman has a Stafford loan and $11,000 in debt. He was once close to defaulting and had to go through a nine-month punitive payment session before his loans would be considered in good standing again. He has no clue how he will pay the loan back.

“I don’t know how I'm going to pay it back,” Halterman, publisher of Out on the Town Magazine, says. “The economy has been so bad. I used up my three-month forbearance this year and they are calling asking for payments. My business is still struggling and I am trying to find a full-time job. Meanwhile, the interest builds up and they want their payments. I don't know what to do.”

For 40-something Generation X’ers, the news is more distressing. They are now struggling to put their children through college, but still face enormous debt for their own college educations. Generation X, unlike Baby Boomers, entered college just as the federal government in the Reagan years cut education grants. Instead, loans became the status quo, and borrowing limits were raised.

Angela Hunter, a university professor in Little Rock, Ark., earned three degrees and studied abroad. She currently has $80,000 in debt, which is down from about $112,000 of her original student loans.

“I have no idea how I'll pay all of them off,” she says. “I started paying one of the loans in the late '90s; it was a privately-issued loan and was not in forbearance when I went on for the next degree. I have been paying regularly on the consolidated version of the loans since 2004, when I completed the Ph.D and got a full-time job. I suspect I'll be paying until retirement.”

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